The Power of Transparency

Belle Beth Cooper |
October 8, 2015

When I joined the team at social-media startup Buffer two years ago, I was excited about how open they were. Both internally and externally, Buffer aims to “default to transparency,” and the founders shy away from hiding information unless they absolutely need to.

Since then, I’ve realized this is more common than I thought. Many other companies are seeking to be transparent about how they run their businesses and what life is like “behind the brand.”

Although I’m no longer at Buffer, I learned a lot about transparency in the time I was there, and I’ve been able to implement it at my own startup, Hello Code. We’ve learned firsthand that, as a smaller company, transparency can help develop relationships with customers and better manage their expectations. Larger companies also find that transparency works well for connecting with future employees and potential investors.

Let’s take a look at the benefits of transparency and how you can implement it within your own business.

Transparency Within a Team

As transparency becomes more common, it’s worth weighing the pros and cons to determine whether it’s always the best approach.

Joel Gascoigne, CEO at Buffer, says transparency is one of the core values of the company because, “Transparency breeds trust, and trust is the foundation of great teamwork.”

Within the company, trust not only affects how employees feel about their managers, but also how confident they feel in making decisions.

Gascoigne notes that when team members are entrusted with all the information available, they can make the same decisions a founder would in their case.

Entrepreneur and investor Keith Rabois agrees on this point. As COO of Square, Rabois felt transparency was the way to build a high-functioning company. For employees to make the same decisions you would, but in a scalable way, Rabois says you need to give them access to the same information you have.

Gascoigne says transparency also helps him battle inequalities at Buffer. One example he points to is Buffer’s salary formula, which determines salaries and bonuses for everyone on the team. “As an example, one factor the formula doesn’t have is gender. When you determine salaries in a more ad-hoc way or through negotiation, I think a lot of inequality could creep in.”

Of course, it’s not necessarily easy to run a transparent company. Jack Dorsey, CEO at Square, told his team early on that he wanted to build a company based on radical transparency, but that it would work only as long as everyone in the team respected the need for confidentiality. This is a promise he regularly reminds the team to commit to as Square continues sharing information freely within the company.

As investor Mark Suster says, it’s the CEO’s job to decide what to share, and with whom, rather than haphazardly sharing everything possible. Oversharing isn’t necessarily the best approach.

Transparency With Customers

We can see that healthy transparency within a company lends a measure of equality to all who work there. Let’s look at some of the specific ways companies are using transparency to grow trust and openness with their customers.

Regular Reports

At Hello Code, we share a post on our company blog every month detailing what we’ve accomplished, how much revenue we’ve made, and how much traffic came to our site and blog. Making this information public shows our customers what our focus is, what stage we’re at, and how much we’re growing. It also encourages us to work hard so we have lots of progress to report each month.

Buffer does a similar thing with their investor updates, which are published to the Open Buffer blog every month. Each update includes how much cash is in the bank, growth stats for user numbers, revenue, team members, and a report on what the focus has been in the company over the past month.

At WP Curve, a WordPress support company, the team shares a monthly blog update that covers people, product, and process, including blog traffic numbers, content-marketing updates, and internal company focus.

Regularly reporting the same numbers so outsiders can see your growth (or lack thereof) makes your company accountable to its customer base and peers.

Open Dashboards

Another way to share numbers is a continually updated dashboard. SaaS analytics company Baremetrics offers a dashboard for your Stripe metrics, and when the company needed data for the product’s demo, founder Josh Pigford decided using the company’s own data would be the easiest option. As a result, all the financial data for Baremetrics became public for anyone to see.

More recently, Buffer created a public dashboard of diversity metrics among their team and new job applicants with always up-to-date information about the demographics of Buffer’s team.

Informal Sharing

On the other end of the scale is more informal sharing, which includes anything from sharing information in interviews to giving transparent talks about aspects of the company.

At Hello Code, we recently started a podcast that gives us an informal outlet for sharing the ups and downs of running our company. My co-founder, Josh, and I chat about a relevant topic every two weeks for 20 to 40 minutes. We share things that are making us worried or bringing us down and things that are going well. From the feedback we’ve received, it seems sharing the things that aren’t going so well has been particularly beneficial for other startup founders who can relate.

Baremetrics’ Pigford turns all of his blog posts into podcast episodes. While his focus is on sharing lessons so his listeners can improve their own businesses, his approach to podcasting is laid-back. Unlike his blog posts, which are carefully structured, the podcast versions give the feeling you’re having an intimate fireside chat with him as he shares his knowledge.

Logging

At Hello Code, we’ve been developing and using a side-project called Littlelogs to share our day-to-day progress. Littlelogs is designed to let you share short snippets about what you’re working on—things you’re learning, updates to your product, or decisions you’re struggling with.

Sharing our progress this way lets our users see exactly what we’re working on, where our focus is, and how fast we’re moving forward. Compared to our monthly reports, it’s a more relaxed, ongoing way of seeing inside our company.

Blogging platform Ghost recently took a step in a similar direction by making its Slack team public. Ghost users can join the team on Slack to chat with other users and developers who are contributing to the open source platform, and even Ghost’s founders.

Far from the tight-lipped, walled-garden of big companies we often deal with, this transparent approach lets users in and promotes trust.

So how can you bring transparency into your own business?

When asked how other companies can follow Buffer’s lead, Gascoigne suggested starting small. “You don’t have to go as far as posting everyone’s salary on the blog,” he says, “Just do a little bit. Experiment with transparency in a small way.”

He suggests sharing information that’s not critical—such as fundraising data or focus updates—to test the waters. Perhaps it’s just sharing meeting minutes or making group email discussions more accessible within the company.

Remember that no matter how you choose to implement transparency, the goal is to build trust and open communication—first within your team, and then with your customers.

About the author: Belle Beth Cooper is a co-founder of Melbourne startup Hello Code, creators of Exist—a personal analytics platform to help you find work/life balance.